Our View On SenSen Networks' (ASX:SNS) CEO Pay

By
Simply Wall St
Published
February 02, 2021
ASX:SNS
Source: Shutterstock

Subhash Challa has been the CEO of SenSen Networks Limited (ASX:SNS) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether SenSen Networks pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for SenSen Networks

Comparing SenSen Networks Limited's CEO Compensation With the industry

At the time of writing, our data shows that SenSen Networks Limited has a market capitalization of AU$106m, and reported total annual CEO compensation of AU$502k for the year to June 2020. That's a notable decrease of 26% on last year. In particular, the salary of AU$305.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below AU$262m, reported a median total CEO compensation of AU$335k. Hence, we can conclude that Subhash Challa is remunerated higher than the industry median. What's more, Subhash Challa holds AU$6.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary AU$305k AU$300k 61%
Other AU$197k AU$377k 39%
Total CompensationAU$502k AU$677k100%

Speaking on an industry level, nearly 60% of total compensation represents salary, while the remainder of 40% is other remuneration. There isn't a significant difference between SenSen Networks and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ASX:SNS CEO Compensation February 3rd 2021

SenSen Networks Limited's Growth

Over the past three years, SenSen Networks Limited has seen its earnings per share (EPS) grow by 82% per year. In the last year, its revenue is up 1.0%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has SenSen Networks Limited Been A Good Investment?

SenSen Networks Limited has generated a total shareholder return of 2.5% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

As previously discussed, Subhash is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth over three years is certainly impressive. We also think investor returns are steady over the same time period. So, considering the EPS growth we do not wish to criticize CEO compensation, though we'd recommend further research on management.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 6 warning signs for SenSen Networks (of which 2 make us uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

If you decide to trade SenSen Networks, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted


This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.